Commonwealth v. Owens-Corning Fiberglas Corp.

Senior Justice Poff,

with whom Chief Justice Carrico and Justice Whiting join, dissenting.

Because the majority has construed the holding in Commonwealth v. Spotslyvania, 225 Va. 492, 303 S.E.2d 887 (1983), too narrowly, I must dissent.

The trial court, relying upon our decision in School Bd. of the City of Norfolk v. U.S. Gypsum, 234 Va. 32, 360 S.E.2d 325 (1987), implicitly ruled that U.S. Gypsum required it to reject the Commonwealth’s argument that the sovereign is exempt from the operation of Code § 8.01-250. As the majority acknowledges, however, “[tjhat question was not raised in U.S. Gypsum”, and it is before us now “as a matter of first impression.” Unfortunately, the majority, although travelling a different route, reaches the same destination as the trial court. I think the Commonwealth is exempt.

At the outset, the Court must look to the common law. Statutes of general application ordinarily do not apply to the sovereign.

In general, legislative acts are intended to regulate the acts and rights of citizens; and it is a rule of construction not to embrace the government or effect [sic] its rights by the general rules of a statute, unless it be expressly and in terms included or by necessary and unavoidable implication.

Levasser v. Washburn, 52 Va. (11 Gratt.) 572, 577 (1854) (citation omitted).

It is old and familiar law, and is applicable to the state as well as the crown, at common law, that where a statute is *603general, and any prerogative, right, title or interest is diverted or taken from the king, in such case, the king shall not be bound unless the statute is made by express words or necessary implication to extend to him.

Whiteacre, sheriff v. Rector & wife, 70 Va. (29 Gratt.) 714, 716 (1878) (emphasis in original) (citation omitted).

We have applied this basic rule not only to statutes of general application, see e.g., Deal v. Commonwealth, 224 Va. 618, 620, 299 S.E.2d 346, 347 (1983) (arbitration); Va. Hot Springs Co. v. Lowman, 126 Va 424, 432, 101 S.E. 326, 329 (1919) (adverse possession); Bellenot v. Richmond, 108 Va. 314, 319, 61 S.E. 785, 786 (1908) (adverse possession), but also to constitutional provisions, see Whiteacre, sheriff v. Rector & wife, supra, (homestead exemption); accord Commonwealth v. Ford, 70 Va. (29 Gratt.) 683 (1878).

One example of statutes of general application is the procedural statute of limitations, sometimes called a “pure” statute of limitations. As to the time restrictions in such statutes, the corollary rule consistently applied in this jurisdiction is defined in simple terms. “Time does not run against the State, nor bar the right of the public.” Buntin v. Danville, 93 Va. 200, 208, 24 S.E. 830, 832 (1896). “Nullum tempus occurrit regi, applies in this state to the Commonwealth, as it does in England to the king.”1 Taylor & als’ Case, 70 Va. (29 Gratt.) 780, 794 (1878). “[T]he statute of limitations does not run against the state unless expressly mentioned.” Va. Hot Spring Co. v. Lowman, 126 Va. at 432, 101 S.E. at 329.

In addition to the common law, the Court must consider Code § 8.01-231, the statute exempting the Commonwealth from time limitations. This statute has a history of more than 200 years, beginning “soon after the revolution ... by the act of October, 1778, c.2 s.4. [where] it is declared that ‘no time shall bar the Commonwealth of execution.’ ” Nimmo’s Executor v. Commonwealth, 14 Va. (4 Hen. & M.) 57, 79 (1809). As written when the suit at bar was filed, Code § 8.01-231 provided as follows:

*604No statute of limitations which shall not in express terms apply to the Commonwealth shall be deemed a bar to any proceeding by or on behalf of the same. This section shall not, however, apply to agencies of the Commonwealth incorporated for charitable or educational purposes.

In Commonwealth v. Spotsylvania, 225 Va. 492, 303 S.E.2d 887 (1983), we were required to determine the scope of the exemption accorded the Commonwealth by that statute. There, the Commonwealth brought suit demanding reimbursement of funds it had advanced to the Spotsylvania Board of Supervisors. Citing § 15.1-552, the Board demurred on the ground that the Commonwealth did not file suit within six months of the date the Board disallowed its claim. The trial court ruled that Code § 15.1-552 ran against the Commonwealth. That statute provided:

When a claim of any person against a county is disallowed ... by the board of supervisors . . . such person . . . may appeal from the decision of the board to the circuit court . . . but in no case shall the appeal be taken after the lapse of six months from the date of the decision ....

The right of judicial review of claims disallowed by counties was a right newly created by the original ancestor of § 15.1-552, and the time limitation was an element of the new right. In other words, this was a statute which

makes the limitation of time inhere in the right or obligation rather than the remedy. It is sometimes referred to as a statute of nonclaim, and, strictly speaking, is not a statute of limitations .... Illustrations of nonclaim statutes ... are those providing for liens of laborers and materialmen, claims against estates of deceased persons, and claims for damages against municipal corporations.

Lane v. Department of Labor and Industries, 21 Wash.2d 420, 425, 151 P.2d 440, 443 (1944).

Construing Code § 8.01-231, we said that the exemption it defines “is absolute and unqualified. It makes no distinction between so-called ‘pure’ statutes of limitation (those which time-restrict the availability of a remedy) and ‘special’ limitations (those prescribed by statute as an element of a newly-created right). Hence, *605whether the time limitation ... is ‘special’ and ‘jurisdictional’ [i.e. substantive], as the Board contends, or merely procedural, it does not operate as ‘a bar to any proceeding by or on behalf of the [Commonwealth]’.” Spotsylvania, 225 Va. at 495, 303 S.E.2d at 889-90 (footnotes omitted). This language was not dicta-, it was central to the ratio decidendi. Reversing the judgment of the court below, we held that the time limitation in § 15.1-552, the nonclaim or “special” statute, did not run against the sovereign, i.e., that the Commonwealth was “not a ‘person’ subject to the time limitation in issue”. Id. at 495, 303 S.E.2d at 890.

Although Code § 8.01-250 is a statute of repose, statutes of repose and nonclaim statutes are essentially the same in function and effect. The effect of both is to create a substantive right in potential defendants, immunizing them from suits once the applicable time period has run. They are different only in that the typical nonclaim statute creates a new right of action and imposes a time limitation as an element of that right, while, generally, a statute of repose creates a right of exemption from enforcement of an existing right of action and imposes a time limitation as an element of that exemption.

The majority suggests no principled distinction between statutes of repose like Code § 8.01-250 and nonclaim statutes such as § 15.1-552, and I see none. Consequently, under both the common-law rule and Code § 8.01-231 as we construed and applied it in Spotsylvania, the time limitation in Code § 8.01-250 does not run against the Commonwealth.2 In my opinion, the Commonwealth is exempt from the exemption accorded those named in Code § 8.01-250.

But, the defendants complain, this Court held in U.S. Gypsum that their exemption is a substantive right protected by the constitutional guarantee of due process.3 They argue, and the majority *606is persuaded, that just as they cannot be deprived wholly of their right by retroactive application of a subsequent statute, they cannot be deprived of their right partially by the exemption claimed by the Commonwealth.

As explained by the Supreme Court in Guaranty Trust Co. v. United States, 304 U.S. 126, 132 (1938), quoting Story, J., in United States v. Hoar, 26 Fed. Cas. 329, 330 (C.C.D. Mass. 1821) (No. 15,373), the modern reason underlying the common-law rule granting the sovereign exemption from statutory time constraints is “the great public policy of preserving the public rights, revenues, and property from injury and loss, by the negligence of public officers. And though this is sometimes called- a prerogative right, it is in fact nothing more than a reservation, or exception, introduced for the public benefit, and isequally applicable to all governments.”

In 1964 when the General Assembly enacted Code § 8-24.2, the predecessor of Code § 8.01-250, such a “reservation, or exception” had been part of the statutory and common law in Virginia for more than two centuries. The legislature, charged with knowledge of that fact, could have included a provision modifying or repealing the common-law rule. It did not do so, and the omission cannot be attributed to oversight. Hence, insofar as applied to the Commonwealth, the new substantive rights created by the statute of repose never came into existence. And, absent relevant legislative amendment in the quarter of a century since the statute of repose was enacted, the Commonwealth’s exemption should prevail today,

Because I think the trial court erred in ruling that Code § 8.01-250 operates against the sovereign, I would reverse the judgment and remand the case to the trial court for further proceedings.

For an analysis of the origin, evolution, and modern rationale of this component of the doctrine of sovereign immunity, see Guaranty Trust Co. v. United States, 304 U.S. 126, 132-33 (1938).

See District of Columbia v. Owens Corning, Fiberglas Corp., 563 A.2d _ (D.C. 1989); State v. Crommett, 116 A.2d 614 (Me. 1955); In re Bogert’s Will, 64 N.M. 438, 329 P.2d 1023 (1958); State Department of Public Welfare v. O’Brien, 292 S.W.2d 733 (Tenn. 1956); 34 ALR2d 1003, 1010 (1954 Supp. 1989); see also United States v. Summerlin, 310 U.S. 414, 416-17 (1940).

The majority contends that this case includes a “classic collision between a constitutionally protected right and a statutory power” and that, under the “bedrock principles of constitutional government”, the constitutionally protected right must prevail. Certainly, this is true when a statute conflicts with a right created by constitutional mandate. However, where, as here, the conflict is one between the substantive right created by Code § 8.01-250 and the right of sovereign immunity from time constraints, the former prevails *606only if the statute which created it so provides, expressly or by necessary implication. A statutorily-created right necessarily is defined by reference to the body of statutory and common law existing at the time the right is created.